Correlation Between IShares Automation and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both IShares Automation and Franklin FTSE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares Automation and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Automation Robotics and Franklin FTSE Asia, you can compare the effects of market volatilities on IShares Automation and Franklin FTSE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Automation with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Automation and Franklin FTSE.
Diversification Opportunities for IShares Automation and Franklin FTSE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Franklin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares Automation Robotics and Franklin FTSE Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Asia and IShares Automation is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Automation Robotics are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Asia has no effect on the direction of IShares Automation i.e., IShares Automation and Franklin FTSE go up and down completely randomly.
Pair Corralation between IShares Automation and Franklin FTSE
Assuming the 90 days trading horizon iShares Automation Robotics is expected to generate 1.4 times more return on investment than Franklin FTSE. However, IShares Automation is 1.4 times more volatile than Franklin FTSE Asia. It trades about 0.25 of its potential returns per unit of risk. Franklin FTSE Asia is currently generating about -0.14 per unit of risk. If you would invest 1,339 in iShares Automation Robotics on September 3, 2024 and sell it today you would earn a total of 87.00 from holding iShares Automation Robotics or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Automation Robotics vs. Franklin FTSE Asia
Performance |
| Timeline |
| iShares Automation |
| Franklin FTSE Asia |
IShares Automation and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Automation and Franklin FTSE
The main advantage of trading using opposite IShares Automation and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Automation position performs unexpectedly, Franklin FTSE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| IShares Automation vs. iShares MSCI Japan | IShares Automation vs. iShares JP Morgan | IShares Automation vs. iShares MSCI Europe | IShares Automation vs. iShares Nasdaq Biotechnology |
| Franklin FTSE vs. Franklin LibertyQ Global | Franklin FTSE vs. Franklin Libertyshares ICAV | Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin LibertyQ AC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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